NZD/USD Technical Strategy: SHORT AT 0.7320
- New Zealand Dollar marks a swing top following soft 4Q GDP report
- Break of support from March low hints larger downtrend back in play
- Short position re-established above 0.73, targeting 2018 range floor
The New Zealand Dollar rebounded against its US counterpart after meeting chart support but the dominant trajectory continues to favor weakness. The currency pair has been drifting downward in a choppy channel since establishing a double top above the 0.74 figure. That trend remains intact for now.
From here, a daily close above resistance marked by a chart inflection point at 0.7260 targets the 0.7355-63 area (March 13 high, channel top). Alternatively, a break of the 38.2% Fibonacci expansion at 0.7140 would also pierce the channel floor, marking down trend acceleration and exposing the 50% level at 0.7048.
A short NZD/USD position was activated at 0.7320. Its initial target at 0.7186 has been hit and profit was booked on half of open exposure. The remainder of the trade continues to be in play to capture any follow-on weakness. A stop-loss will be triggered on a discretionary basis if the boundaries of the overall down trend appear to have been breached.
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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